Healthy Skepticism Library item: 10086

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Publication type: news

Bristol to plead guilty to charges in Plavix deal
Reuters 2007 May 10
http://biz.yahoo.com/rb/070510/bristolmyers_settlement.html?.v=3

Full text:

NEW YORK (Reuters) – Bristol-Myers Squibb Co. will plead guilty to criminal charges to resolve an investigation by U.S. antitrust regulators into a patent settlement involving its blockbuster Plavix blood thinner, the company said on Thursday.

The charges consist of two counts of violations relating to false statements to a government agency and carry a maximum fine of $1 million, the company said.

At issue is a patent settlement involving Bristol, marketing partner Sanofi-Aventis (Paris:SASY.PA – News), and the Canadian generic drug maker Apotex over Plavix. The settlement among the companies would have delayed generic competition to Plavix, but it collapsed.

The agreement in principle with the Antitrust Division of the U.S. Department of Justice is contingent on the plea being accepted by the court, Bristol said, adding that there can be no assurance that an agreement will be finalized or that the plea will be accepted.

The charges relate to representations made by a former Bristol senior executive during the renegotiation of the proposed Plavix settlement in May 2006 that were not disclosed to the U.S. Federal Trade Commission, Bristol said.

That executive was Andrew Bodnar, former senior vice president of strategy, who has since left the company, according to a source familiar with the situation. Bodnar was a key executive involved in the Plavix negotiations with Apotex.

Bodnar could not immediately be reached for comment.

The company declined to comment or speculate on any possible additional charges.

Justice Department spokeswoman Gina Talamona said, “We have no comment unless and until charges and a plea agreement are filed with the court.”

The New York-based drug maker has been operating under a deferred prosecution agreement with U.S. prosecutors in New Jersey stemming from an accounting scandal.

According to Bristol, the U.S. prosecutors believe the company has remedied breaches stemming from the Plavix antitrust charges by terminating the employment of certain former senior officers and taking other actions.

Former CEO Peter Dolan and general counsel Richard Willard lost their jobs in the wake of the failed Plavix deal.

The prosecutors intend to release Bristol from the deferred prosecution agreement on June 15, according to the company.

The company said it does not believe the resolution of the antitrust investigation should have a material impact on its ability to participate in federal procurement or health care programs, although there can be no assurance of this.

(Additional reporting by Peter Kaplan in Washington)